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US weekly jobless claims flattening as labour market momentum ebbs
[WASHINGTON] The number of Americans filing new claims for unemployment benefits hovered at high levels last week, suggesting the labour market recovery from the Covid-19 pandemic was stalling.
The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy's health, followed news last Friday of a further slowdown in employment growth in August and an increase in permanent job losses.
The ebb in momentum comes as government financial aid to businesses and the unemployed has virtually dried up. At least 29.6 million people were on unemployment benefits in August.
"Layoffs remain widespread and the labour market remains in a fragile place at a critical juncture," said Nancy Vanden Houten, lead US economist at Oxford Economics in New York. "Failure on the part of policymakers to enact another fiscal relief package poses significant downside risks to the economy and labour market." Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 884,000 for the week ended Sept 5. Claims dropped the prior week after the government changed the methodology it used to address seasonal fluctuations in the data, which had become less reliable because of the economic shock caused by the coronavirus crisis.
Economists polled by Reuters had forecast 846,000 applications in the latest week. With changes to seasonal factors out of the way, economists expect claims, which have dropped from a record 6.867 million at the end of March, to drift around current levels for a while as the pandemic lingers.
Unadjusted initial claims increased 20,140 to 857,148 last week. Government money, which was credited for the sharp rebound in economic activity, starting with record retail sales growth in May, lapsed in July.
Airlines, including United Airlines and American Airlines have announced furloughs and job cuts. There have also been layoffs at oilfield services and equipment companies.
Economists believe the labour market could take years to return to its pre-pandemic levels.